Winning Smile: Accounting Homework - Trial Balance and Ledger

This document presents a comprehensive solution to an accounting homework assignment. The solution begins with journal entries detailing various transactions, followed by the creation of general ledgers for accounts like Cash at Bank, Accounts Receivable, and Loan Payable. The assignment then progresses to a trial balance, incorporating balances from the general ledger and addressing accounting elements and assumptions, particularly focusing on loan payables and the separate entity assumption. The solution also includes a discussion of accounting elements, the accounting equation, and relevant references, providing a complete overview of the accounting process and financial statement preparation. The document is a valuable resource for students seeking to understand and solve accounting problems related to trial balances and general ledgers.

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Accounting

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Table of Contents
Question 1..................................................................................................................................3
Part 1......................................................................................................................................3
Part 2......................................................................................................................................4
Part 3......................................................................................................................................6
Question 2..................................................................................................................................7
Accounting element for loan payable....................................................................................7
Accounting assumption..........................................................................................................8
References..................................................................................................................................9

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Question 1
Part 1
Date Details Debit ($) Credit ($)
October 1 Van A/c Dr.
To cash
(Van purchased for cash)
42000
42000
October 3 Cleaning expenses A/c Dr
To Spick and span cleaning services
(Cleaning services are taken from the
company on 30 days payment condition)
456
456
October 10 Cash A/c Dr.
Mining business A/c Dr.
To sales
(Catering service provided to mining
business)
3600
8400
12000
October 15 Computer A/c Dr.
To Accounts payable
(Laptop computer purchased for credit)
1995
1995
October 17 Wages A/c Dr.
To cash
(Waiting staff wages paid)
2100
2100
October 21 Cash A/c Dr.
To Mining business
(Amount due on corporate retreat service
received)
8400
8400
October 24 Drawings A/c Dr.
To Bank
(Paid repairing charges of the home inverter
from a business bank account)
640
640
October 29 Accounts payable A/c Dr.
To cash
(Outstanding amount for computer purchase
paid)
1995
1995
October 30 Electricity expense A/c Dr.
To cash
(Paid electricity bill for cash)
435
435
Total 70021 70021

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Part 2
Cash at Bank (CAB)
November
1
Op Balance 100,419 November
5
By dental
equipment
20000
November
1
November
25
November
30
To capital G.
Vitus
To account
receivable
To sales
29000
10500
26400
November
11
November
15
November
30
By drawings
By Loan
Closing balance
300
2500
143519
Accounts Receivable (A/R)
November 1 Op Balance 19,560 November
25
By CAB 10500
November
30
To sales 55600 Novembe
r 30
Closing
balance
64660
Dental Equipment
November
1
Op Balance 60,413
November 5 To CAB 20000
November 5 To Loan
payable
54000 November
30
Closing
balance
134413
Office Equipment
November
1
Op Balance 144,000
November
1
To capital G.
Vitus
7000 November
30
Closing balance 151000

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Loan Payable
November
15
To CAB 2500 November 5 By dental
equipment
54000
November
30
Closing
balance
51500
Capital – G. Vitus
November 1 Op Balance 289,593
November 1 By CAB 29000
November
30
Closing
balance
325593 November 1 By Office
equipment
7000
Drawings – G. Vitus
November
1
Op Balance 90,900
November
11
To CAB 300 November 30 Closing
balance
91200
Sales
November 1 Op Balance 697,428
November
30
By CAB 26400
November
30
Closing
balance
779428 November
30
By
accounts
receivable
55600

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Part 3
Winning Smile
Trial Balance
30 November 2019
Debit ($) Credit ($)
Cash at Bank 143519
Accounts Receivable 64660
Inventory 293,652
Dental Equipment 134413
Accum Depreciation – Dental Equipment 65,200
Office Furniture 101,439
Accum Depreciation – Office Furniture 67,689
Office Equipment 151000
Accounts Payable 39,375
Repairs and Maintenance Payable 22,110
Loan Payable 51500
Capital – G. Vitus 325593
Drawings – G. Vitus 91200
Sales 779428
Sales Returns & Allowances 2,364
Electricity Expense 44,946
Telephone Expense 3,075
Advertising Expense 20,177
Office Supplies Expense 3,841
Office Gas Expense 1,694
Water Expense 8,811

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Discount Allowed 4,295
Rent Expense 244,345
Repairs and Maintenance Expense 18,987
Interest Expense 18,477
Totals 1350895 1350895
Question 2
To,
Heather Prider
Managing partner
Prider & Copeland accounting services Pty Ltd
28th March 2020
Dear Managing Partner,
I have noted the issues which are raised by the client and responding in that respect with this
letter.
Accounting element for a loan payable
In accounting, there are various elements that are involved and they mainly comprise of the
equity, liability and assets which are found in the accounting equation also. Out of all of
them, the loan payment will be part of the liability element.
As per the accounting equation, there are three components under which all the accounts are
involved and the transactions are recorded. Equity is the component in which the amount
which is left for the owners is recorded (Protopapas et al., 2012). This includes the amount
which is initially contributed by the owner for the business and from that all the drawings are
eliminated and the addition of income which is made is considered. Due to this, the loan
payable will not be covered in this element.

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The second component is assets which are a debt balance and covers all the assets whether
current or non-current. The current assets are those which are involved for trading in 12
months periods and all others are non-current. The loan payable is a credit balance and does
not count for the assets.
The liability is the third component and in that, all the credit balances which are to be met by
the business in the coming period are covered. The loan payable is the amount borrowed and
will be required to be paid in the coming period. Due to this fact, the loan payable is
considered under the liability element.
Accounting assumption
In the process of accounting, there are various assumptions that are involved and in the given
case the separate entity assumption is used for recording the drawings transaction. According
to this assumption, the business is considered as a separate entity from its owner and all the
expenses and incomes which are made by the owner for personal use are recorded separately
(Accounting tools, 2018). The same is used in a given case as the amount paid for injury of a
daughter has been debited to the drawings account which is a separate account and has not
been considered for the owner’s account. In the records, the transactions of business will be
reflected and the personal expenses will be eliminated for which the drawings are reduced
from the equity balance.
I hope All the issues of the client will be resolved with the help of the information provided.
Regards,
Professional developer

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References
Accounting tools. (2018) The key accounting assumptions. [Online] Available at:
https://www.accountingtools.com/articles/what-are-the-key-accounting-assumptions.html
[Accessed 28 March 2020]
Protopapas, A., Simos, P.G., Sideridis, G.D. and Mouzaki, A. (2012) The components of the
simple view of reading: A confirmatory factor analysis. Reading Psychology, 33(3), pp.217-
240.